Navigating A Lowball

The real estate market has been anything but predictable over the past three years, most notably with interest rates and home prices. Looking at charts of these two things reads like a hospital machine that’s gone berserk. Now, as interest rates spike to their highest levels in decades, home prices are dropping. Granted, they’re not falling rapidly but they are slowing. This gives buyers a bit of confidence and may cause some to make a lowball offer on your listing.

What Should You Do? 

Receiving a lowball offer isn’t a death knell, and it isn’t something to cause insult. It is a power dynamic, though, and you can rise to that challenge and use a lowball offer to your favor. In a way, a lowball offer puts the low-ball in your court. Ha! See what we did there? 

When you receive a lowball offer, fight all urges to respond with an attitude. In fact, if you respond with gratitude, you may throw off the potential buyer. Responding negatively may make the buyer walk. After all, no one wants to work with someone who has an attitude! Being gracious (even in the face of a perceived slight) could salvage a potential sale. Realtor.com suggests saying: “We greatly appreciate your offer, and we’d love to work with you. Here is our counteroffer.”

What you offer as a counter also takes some strategy. Don’t feel compelled to meet the lowball offer halfway or to drastically undersell your property. After all, when working with an agent, you likely arrived at a thought-out price point in-line with the comps for your area. Offer a slight price reduction with an explanation as to why you’re firm.

Negotiations can volley back and forth for a while. If you’re sensing an impasse but do still feel compelled to work with this particular buyer, consider negotiations that don’t have much to do with the actual sales price of your home. Some ideas of this are offering a shortened escrow period, asking for a higher earnest money deposit to guarantee they won’t walk, or to settle on an information-only inspection, meaning the buyers won’t ask for any repairs to be made on anything that comes back from an inspector. 

If you receive a lowball offer, especially in this often confusing real estate market, you no longer have to run screaming for the hills.